TCRLA_Public/050711.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

             Monday, July 11, 2005, Vol. 6, Issue 135

                            Headlines

A R G E N T I N A

ALIMENTOS FARGO: Releases Details of ARS523.2 Mln Debt Proposal
DROGUERIA LUVI: Seeks Court Approval to Reorganize
EQUITRON S.R.L.: Bankruptcy Initiated Following Court Ruling
EXEMPLA COMPANIA: Asset Liquidation Required to Pay Debts
LA FRAGUA: Court Rules for Liquidation

LE TECHNICE: Enters Bankruptcy on Court Orders
LOUCEN INTERNATIONAL: Debt Payments Halted, Set To Reorganize
NOUVEAU AUCTION: Files for Bankruptcy
SAN JOSE: Bankruptcy Ruling Requires Liquidation
TECNOFAR S.A.: Liquidates Assets to Pay Debts

TER SERVICE: Declared Bankrupt by Court
OSTRILION S.A.C.E.I.: Finalizes Reorganization
* ARGENTINA: Credit Upgrade Unlikely; Uncertainty Persists
* FORMOSA: Moody's Moves Rating (National Scale) to D.ar


B R A Z I L

BANDEIRANTE ENERGIA: Moody's Withdraws Ratings
CORSAN: Moody's Withdraws Ratings Following Full Debt Repayment
KLABIN: Goiana Project Finalized, Status Updated
UNIBANCO: Board Sets July 15 Meeting; Announces Agenda
USIMINAS: Moody's Places Ratings on Review for Possible Upgrade


C O S T A   R I C A

ICE: Sacks Director for Alleged Irregularities


E C U A D O R

PACIFICTEL: Chairman Quits Post
PETROECUADOR: President Recommends Restructuring
PETROECUADOR: President Denies Alleged State Indebtedness


H O N D U R A S

* HONDURAS: WB Approves $97M Loan For Poverty Reduction


J A M A I C A

AIR JAMAICA: Government, Opposition Compromise to Save Airline


M E X I C O

INNOVA: Moody's Upgrades Corporate Family Rating to Ba3 from B2


T R I N I D A D   &   T O B A G O

BWIA: Prime Minister Discusses Murky Outlook


     - - - - - - - - - -


=================
A R G E N T I N A
=================

ALIMENTOS FARGO: Releases Details of ARS523.2 Mln Debt Proposal
---------------------------------------------------------------
Compania de Alimentos Fargo SA, the country's leading maker of
packaged bread, presented Thursday a long-awaited proposal to
restructure ARS523.2 million in debt, reports Dow Jones
Newswires. In a statement to the local stock exchange, Fargo
disclosed it has ARS96.5 million in privileged debt and ARS410.7
million in non-privileged debt (US$ 1 = ARS2.90).

Before paying these two groups, Fargo will first pay the ARS16
million in "bankruptcy expenses" in two annual installments
beginning in December 2005.

The national tax agency, AFIP, which holds ARS3.9 million in
privileged debt, will receive the first of eight annual payments
starting in December 2005, with no grace period.

Bismark Acquisition LLC, which holds US$31.7 million (ARS91.93
million) in privileged debt, will be paid back in annual
installments over eight years, with a one-year grace period,
beginning December 2006.

The remaining privileged debt, totaling ARS668,369, will follow
the same payment plan as Bismark's.

Among non-privileged debt, Fargo has US$134.9 million (ARS391.1
million) in bonds to restructure. The Company is proposing to
exchange those obligations for peso-denominated notes totaling
ARS391.1 million, with the maturity stretched to 2037 and a
grace period of seven years. The new bonds will not pay
interest. Principal payments begin in 2012.

Fargo said it owes a further $810,451 (ARS2.35 million) and
ARS17.2 million in non-privileged debt. Repayments on these
obligations will also be done over a period of 32 years with
seven years of grace. Installments begin in 2012 and do not pay
interest.

The Company released the details of the debt proposal around the
same time it was starting a meeting with creditors in Buenos
Aires.

Fargo's first round of negotiations failed to produce results
last year. Earlier this year, company executives restarted talks
with the main creditors with the backing of Mexican baked-goods
company Grupo Bimbo, which holds a 30% stake in the consortium
that owns Fargo.

To see a copy of Fargo's statement to the Comision Nacional de
Valores, http://bankrupt.com/misc/CNV_Statement.pdf


DROGUERIA LUVI: Seeks Court Approval to Reorganize
--------------------------------------------------
Drogueria Luvi S.A., a company operating in Buenos Aires, has
requested for reorganization after failing to pay its
liabilities, Infobae reports.

The reorganization petition, once approved by the court, will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

The case is pending before Court No. 1 of the city's civil and
commercial tribunal. Clerk No. 2 assists on this case.

CONTACT: Drogueria Luvi S.A.
         Vieytes 1257
         Buenos Aires


EQUITRON S.R.L.: Bankruptcy Initiated Following Court Ruling
------------------------------------------------------------
Equitron S.R.L. enters bankruptcy protection after Court No. 26
of Buenos Aires' civil and commercial tribunal, with the
assistance of Clerk No. 51, ordered the Company's liquidation.
The order effectively transfers control of the Company's assets
to a court-appointed trustee who will supervise the liquidation
proceedings.

Infobae reports that the court selected Adalberto Abel
Corbelleri as trustee. Mr. Corbelleri will be verifying
creditors' proofs of claim until the end of the verification
phase on Sep. 9, 2005.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the Company's accounting
and business records. The individual reports will be submitted
on Oct. 24, 2005 followed by the general report, which is due on
Dec. 5, 2005.

CONTACT: Equitron S.R.L.
         Avda Triunvirato 5657
         Buenos Aires

         Mr. Adalberto Abel Corbelleri, Trustee
         Carabobo 237
         Buenos Aires


EXEMPLA COMPANIA: Asset Liquidation Required to Pay Debts
---------------------------------------------------------
Buenos Aires-based Exempla Compaia Argentina de Servicios S.R.L.
will begin liquidating its assets following the pronouncement of
the city's civil and commercial Court No. 17 that the Company is
bankrupt, reports Infobae. The bankruptcy ruling places the
Company under the supervision of court-appointed trustee, Angel
Vello Vazquez. The trustee will verify creditors' proofs of
claim until Aug. 16, 2005. The validated claims will be
presented in court as individual reports on Sep. 28, 2005.

Ms. Vazquez will also submit a general report, containing a
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy, on Nov. 10, 2005.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors.

CONTACT: Exempla Compania Argentina de Servicios S.R.L.
         Tronador 230
         Buenos Aires

         Ms. Angel Vello Vazquez, Trustee
         Parana 275
         Buenos Aires


LA FRAGUA: Court Rules for Liquidation
--------------------------------------
Court No. 25 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of La Fragua S.R.L. after the Company
defaulted on its obligations, Infobae reveals. The liquidation
pronouncement will effectively place the Company's affairs as
well as its assets under the control of Hector A. Franco, the
court-appointed trustee.

Mr. Franco will verify creditors' proofs of claim until Sep. 1,
2005. The verified claims will serve as basis for the individual
reports to be submitted in court on Oct. 14, 2005. The
submission of the general report follows on Nov. 25, 2005.

Clerk No. 49 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Mr. Hector A. Franco, Trustee
         Chacabuco 178
         Buenos Aires


LE TECHNICE: Enters Bankruptcy on Court Orders
----------------------------------------------
Buenos Aires' civil and commercial Court No. 7 declared Le
Technice S.A. bankrupt after the Company defaulted on its debt
payments. The bankruptcy order effectively places the Company's
affairs as well as its assets under the control of a court-
appointed trustee.

The trustee is tasked with verifying the authenticity of claims
presented by the Company's creditors.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on Sep. 13, 2005. A general report will
also be submitted on Oct. 26, 2005.

Infobae reports that Clerk No. 13 assists the court on this
case, which will end with the disposal of the Company's assets
in favor of its creditors.


LOUCEN INTERNATIONAL: Debt Payments Halted, Set To Reorganize
-------------------------------------------------------------
Court No. 16 of Buenos Aires' civil and commercial tribunal is
reviewing the merits of Loucen International S.A. petition to
reorganize. Infobae indicates that the Company filed the
petition following cessation of debt payments. Reorganization
will allow Loucen International S.A. to avoid bankruptcy by
negotiating a settlement with its creditors.

Clerk No. 32 is assisting the court on the Company's case.

CONTACT: Loucen International S.A.
         Paraguay 647
         Buenos Aires


NOUVEAU AUCTION: Files for Bankruptcy
-------------------------------------
Buenos Aires' civil and commercial Court No. 20 is currently
reviewing the merits of the bankruptcy petition filed by Nouveau
Auction International S.A. Infobae reports that the Company
filed the request after defaulting on its debt payments.

Clerk No. 40 assists the court on this case.

CONTACT: Nouveau Auction International S.A.
         Tucuman 540
         Buenos Aires


SAN JOSE: Bankruptcy Ruling Requires Liquidation
------------------------------------------------
San Jose Parking S.A. of Buenos Aires will begin liquidating its
assets after Court No. 7 of the city's civil and commercial
tribunal declared the Company bankrupt. Infobae reveals that the
bankruptcy process will commence under the supervision of court-
appointed trustee, Jorge Edmundo Sahade.

The trustee will review claims forwarded by the Company's
creditors until Sep. 9, 2005. After claims verification, Mr.
Sahade will submit the individual reports for court approval on
Oct. 24, 2005. The general report will follow on Dec. 5, 2005.
Clerk No. 13 assists the court on this case.

CONTACT: Mr. Jorge Edmundo Sahade, Trustee
         Avda. de Mayo 1324
         Buenos Aires


TECNOFAR S.A.: Liquidates Assets to Pay Debts
---------------------------------------------
Tecnofar S.A. will begin liquidating its assets following the
pronouncement of the city's civil and commercial Court No. 23
that the Company is bankrupt, Infobae reports.

The bankruptcy ruling places the Company under the supervision
of court-appointed trustee, Luis Hugo Di Cesare. The trustee
will verify creditors' proofs of claim until Aug. 25, 2005. The
validated claims will be presented in court as individual
reports on Oct. 11, 2005.

Mr. Di Cesare will also submit a general report, containing a
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy, Nov. 23, 2005.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors.

CONTACT: Tecnofar S.A.
         Viamonte 1465
         Buenos Aires

         Mr. Luis Hugo Di Cesare, Trustee
         Viamonte 1336
         Buenos Aires


TER SERVICE: Declared Bankrupt by Court
---------------------------------------
Ter Service S.R.L. is now "Quiebra" - meaning bankrupt, says
Infobae. Buenos Aires' civil and commercial Court No. 13 decreed
the Company's bankruptcy and appointed Flora Marcela Pazos, as
receiver for the Company.

Ms. Pazos will be reviewing creditors' claims until Sep. 2,
2005. Analyzing these claims is important because the outcome of
the process will determine the amount each creditor will get
after all the assets of the Company are liquidated.

The court, which is aided by Clerk No. 25, will conclude the
bankruptcy process by liquidating its assets to repay creditors.

CONTACT: Ms. Flora Marcela Pazos, Trustee
         Montevideo 527
         Buenos Aires


OSTRILION S.A.C.E.I.: Finalizes Reorganization
----------------------------------------------
The reorganization of Ostrilion S.A.C.E.I. has been concluded.
Data revealed by Infobae on its Web site indicated that the
process was concluded after the Buenos Aires' civil and
commercial Court No. 10, with assistance from Clerk No. 19,
homologated the debt agreement signed between the Company and
its creditors.

CONTACT: Ostrilion S.A.C.E.I.
         Buenos Aires


* ARGENTINA: Credit Upgrade Unlikely; Uncertainty Persists
----------------------------------------------------------
Moody's Investors Service is unlikely to upgrade Argentina's
credit rating, which is now six levels below investment grade,
in the next two years due to concern about sustained economic
growth and the country's debt burden, reports Bloomberg.

"At this moment, the probability of an improvement to the
country's B3 rating is low. There is a lot of uncertainty," said
Mauro Leos, a vice president and senior credit officer at
Moody's.

"Argentina continues to have an economy with a high debt load
and the big question is if what we have seen up to now is a sign
of what is to come," Mr. Leos added.


* FORMOSA: Moody's Moves Rating (National Scale) to D.ar
--------------------------------------------------------
Moody's Latin America S.A changed to D.ar from Ca.ar (Argentina
National Scale) the rating assigned to the Province of Formosa's
Co--participation Tax Revenue Secured Notes initially
denominated in dollars and "pesified" in February 2002. These
bonds remain in default. The Ca (Global Scale) rating is
unchanged and the rating outlook is stable.



===========
B R A Z I L
===========

BANDEIRANTE ENERGIA: Moody's Withdraws Ratings
----------------------------------------------
Moody's Investors Service has withdrawn the Ba3 Global Local
Currency and A3.br Brazilian National Scale Senior Unsecured
Issuer Ratings of Bandeirante Energia S.A.. The ratings have
been withdrawn for business reasons.

Bandeirante Energia S.A. is an electricity distribution utility
with 1.3 million customers and operating in the eastern portion
of the state of Sao Paulo, Brazil.


CORSAN: Moody's Withdraws Ratings Following Full Debt Repayment
---------------------------------------------------------------
Moody's Investors Service has withdrawn the B2 Global Local
Currency and Ba2.br Brazilian National Scale Senior Unsecured
Issuer Ratings of Companhia Riograndense de Saneamento - CORSAN.
The ratings have been withdrawn as the company's debt rated by
Moody's was fully repaid upon maturity.

Companhia Riograndense de Saneamento - CORSAN provides water and
wastewater services to a population of over 6.5 million residing
in the State of Rio Grande do Sul. The company serves 69% of the
municipalities in Rio Grande do Sul under long-term concession
agreements. The company's voting shares are 99.99% held by the
State of Rio Grande do Sul.


KLABIN: Goiana Project Finalized, Status Updated
------------------------------------------------
Klabin has completed the project to refurbish and expand the
capacity of its packaging unit in Goiana (PE) after one year of
implementation. The unity, which produces corrugated boxes to
several segments, has gone through a number of repairs
additionally to the purchase of new equipment. Among its results
the project expanded by 30% of the unit production capacity,
which now totals 5 thousand tons per month.

Investments for project implementation were R$30 million.
According to Klabin business director for Packaging Carlos
Alberto Masili, the main goal of those investments is to serve
more effectively customers from the Northeast region of the
country.

The unity serves the fruit, food, hygiene and cleaning and
beverage markets. "Those segments show an increasing growth in
the northeastern states and Klabin is able to follow this
trend," says Masili. "For such, we combined innovation and high
technology in the development of our products, creating tailor-
made solutions that serve each customer's specific needs," he
adds.

Among other developments, the project included the building of a
new reel warehouse, the installation of a new corrugator machine
and the purchase of new types of printers. According to unit's
manager Antonio Jos‚ Belo, the works aimed primarily at
eliminating obstruction, which reflected directly on unit
effectiveness, final product quality and customer service.
"These changes increased even more the unit technological
level", he explains.

Klabin has sales offices in Recife (Pe), Petrolina (PE) and
Fortaleza (CE) to provide better service to customers of several
states of the region, such as Rio Grande do Norte, Paraiba and
Ceara.

Goiana refurbishing and expansion project confirms the Klabin
commitment to the development of the areas where it operates.
"We are constantly investing on personnel training and income
generation to those towns without neglecting the principles of
sustainable development that direct the company's actions,"
explains Klabin's CEO Miguel Sampol.

Sampol also emphasizes that the company continually invests on
research in order to add more value to its costumers' businesses
- 20% of which is exports - in both domestic and foreign
markets.

Distribution Center

Klabin has recently opened its Petrolina (PE) service unit
aiming at improving the supply of packaging for agricultural
products in the Northeast. The goal was to create an advanced
center of operational support intended to the sale of generic
packages to small and medium-sized markets, and to provide
assistance to its partners' in the event of urgent requests,
besides operating as a closed warehouse to future deliveries.
The center is supplied by Klabin unities of Feira de Santana
(BA) and Goiana.

CONTACT: Klabin S.A.
         Mr. Ronald Seckelmann
         CFO and IR Director

         Mr. Luiz Marciano Candalaft
         IR Manager
         Phone: (5511) 3046-5847
         E-mail: marciano@klabin.com.br

         Mr. Gustavo Vittorazze Schroden
         IR Analyst
         Phone: (5511) 3046-5934
         E-mail: gvschroden@klabin.com.br


UNIBANCO: Board Sets July 15 Meeting; Announces Agenda
------------------------------------------------------
The Board of Officers of Unibanco - Uniao de Bancos Brasileiros
S.A. and of Unibanco Holdings S.A. intend to hold a meeting on
July 15, 2005 with their respective Boards of Directors for the
proposals for the payment of interest on capital stock.

PROPOSALS FOR THE PAYMENT OF INTEREST ON CAPITAL STOCK

A) The Board of Officers of UNIBANCO - Uniao de Bancos
Brasileiros S.A. ("Unibanco") and of UNIBANCO HOLDINGS S.A.
("Unibanco Holdings") have decided to propose to their
respective Boards of Directors to hold meetings on July 15, 2005
in order to discuss:

I. The payment, only to the shareholders of Unibanco Holdings,
of interest on capital stock, qualified as complementary to the
interest on capital paid related to the profit ascertained in
the 2004 fiscal year, in the gross amount of R$2.8 million and
total net amount of R$2.4 million, to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2004, in accordance
with the provisions of article 9th of Federal Law 9,249/95 and
Article 35, sole paragraph, of the By-laws of Unibanco Holdings.

Should the proposal described herein be approved, the
shareholders of Unibanco Holdings shall have the right to
receive the interest on capital stock in accordance with the
gross and net amounts set forth in the table below. Such values
correspond to one (1) share, one (1) Share Deposit Certificate
("Unit")*, or one (1) Global Depositary Share ("GDS")**, as the
case may be. An income tax rate of fifteen percent (15%) will be
withheld from such gross amounts, resulting in the net values
set forth below:

In R$         HOL-ON           HOL-PN        UNIT        GDS
              UBHD3            UBHD6         UBBR11      NYSE-
UBB
Gross Value   0.0033367        0.0033367     0.0033367
0.0166835
Net Value     0.0028361        0.0028361     0.0028361
0.0141805

(*) Each UNIT represents one preferred share of Unibanco and one
preferred share of Unibanco Holdings.
(**)Each GDS listed on the New York Stock Exchange (NYSE: UBB)
is equivalent to 5 Units.

II. The payment of Quarterly Interests, related to the second
quarter of 2005, in the gross total amounts of R$56.7 million
and R$28.0 million, and net total amount of R$48.2 million and
R$23.8 million, respectively to Unibanco and Unibanco Holdings,
to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2005, in accordance
with the provisions of article 9th of Federal Law 9,249/95,
Article 44, paragraph 8th of the By-laws of Unibanco and Article
35, sole paragraph, of the By-laws of Unibanco Holdings.

Should the Quarterly Interests proposals described herein be
approved by the respective Board of Officers, the shareholders
of Unibanco and/or Unibanco Holdings shall have the right to
receive interest on capital stock in accordance with the gross
and net amounts set forth in the table below. Such values
correspond to one (1) share, one (1) Unit, or one (1) GDS, as
the case may be. An income tax rate of fifteen percent (15%)
will be withheld from such gross amounts, resulting in the net
values set forth below:

In R$ UBB-ON    UBB-PN    HOL-ON    HOL-PN    UNIT      GDS
      UBBR3     UBBR4     UBHD3     UBHD6     UBBR11    NYSE-UBB

Gross
Value 0.0388235 0.0427059 0.0337633 0.0337633 0.0764692
0.3823460
Net
Value 0.0330000 0.0363000 0.0286988 0.0286988 0.0649988
0.3249940

III. The payment of interest on capital stock, qualified as
complementary to the interest on capital paid related to the
profit ascertained in the first semester of 2005, in the total
gross amount of R$219.1 million and R$104.2 million, and total
net amount of R$186.2 and R$88.5 million, respectively to
Unibanco and Unibanco Holdings, to be made on July 29, 2005.

This payment shall be considered as part of the mandatory
dividend corresponding to the fiscal year of 2005, in accordance
with the provisions of article 9th of Federal Law 9,249/95,
Article 44, paragraph 8th , of the By-laws of Unibanco and
Article 35, sole paragraph, of the By-laws of Unibanco Holdings.

Should the proposals described herein be approved, the
shareholders of Unibanco and Unibanco Holdings shall have the
right to receive the interest on capital stock in accordance
with the gross and net amounts set forth in the table below.
Such values correspond to one (1) share, one (1) Unit, or one
(1) GDS, as the case may be. An income tax rate of fifteen
percent (15%) will be withheld from such gross amounts,
resulting in the net values set forth below:

In R$ UBB-ON    UBB-PN    HOL-ON    HOL-PN    UNIT      GDS
      UBBR3     UBBR4     UBHD3     UBHD6     UBBR11    NYSE-UBB
Gross
Value 0.1499554 0.1649509 0.1254328 0.1254328 0.2903837
1.4519185
Net
Value 0.1274620 0.1402082 0.1066178 0.1066178 0.2468260
1.2341300

B) Considering the proposals in items (I), (II) and (III), the
total amount proposed to be paid in interests on capital stock
on July 29, 2005 is the gross amounts of R$275.8 million and
R$135.0 million, and the net amounts of R$234.4 million and
R$114.7million, respectively to Unibanco and Unibanco Holdings.
Such values correspond to (I) complementary interest on capital
paid related to the profit ascertained in the 2004 fiscal year
of Unibanco Holding; (II) quarterly interest of Unibanco and
Unibanco Holding related to the second quarter of 2005; and
(III) complementary interest on capital paid related to the
profit ascertained in the first semester of 2005 of Unibanco and
Unibanco Holdings.

Should the proposals described herein be approved, the
shareholders of Unibanco and Unibanco Holdings shall have the
right to receive the interest on capital stock in accordance
with the gross and net amounts set forth in the table below.
Such values correspond to one (1) share, one (1) Unit, or one
(1) GDS, as the case may be. An income tax rate of fifteen
percent (15%) will be withheld from such gross amounts,
resulting in the net values set forth below:

In R$ UBB-ON    UBB-PN    HOL-ON    HOL-PN    UNIT      GDS
      UBBR3     UBBR4     UBHD3     UBHD6     UBBR11    NYSE-UBB
Gross
Value 0.1887789 0.2076568 0.1625328 0.1625328 0.3701896
1.8509480
Net
Value 0.1604620 0.1765082 0.1381527 0.1381527 0.3146609
1.5733045

C) Should the proposals above be approved:

In Brazil, July 15, 2005 will be considered as "Record Date" for
the purpose of determining the holders of shares and Units who
will be entitled to receive the proposed payment, on July 29,
2005. Unibanco's and Unibanco Holdings' shares and Units will be
traded in the Brazilian market without the right to receive
payment of interest on capital stock (ex-interest on capital
stock) from July 18, 2005 on.

In the United States of America, July 20, 2005 will be
considered as "Record Date" for the purpose of determining the
holders of GDS who will be entitled to receive the proposed
payment. The GDSs will be traded without the right to receive
payment of interest on capital stock (ex-interest on capital
stock) from July 18, 2005 on.

CONTACT: Unibanco - Uniao de Bancos Brasileiros S.A.
         Investor Relations Area
         Av. Eusebio Matoso, 891 - 15th floor
         Sao Paulo, SP 05423-901- Brazil
         Phone: (55 11) 3097-1980
         Fax: (55 11) 3813-6182
         E-mail: investor.relations@unibanco.com
         URL: www.ir.unibanco.com


USIMINAS: Moody's Places Ratings on Review for Possible Upgrade
---------------------------------------------------------------
Approximately USD 175 Million of Debt Affected

Moody's Investors Service placed Thursday the debt ratings of
Usinas Sider£rgicas de Minas Gerais S.A. -- USIMINAS
("Usiminas") and Companhia Sider£rgica Paulista -- COSIPA
("Cosipa") on review for possible upgrade.

Ratings placed under review are as follows:

- USD 175 million MTN issued by Cosipa, guaranteed by Usiminas:
B1 (Foreign Currency)

- USD 500 million Senior Unsecured Global MTN Program issued by
Usiminas without guarantee from Cosipa: B2 (Foreign Currency)

- USD 500 million Senior Unsecured Global MTN Program issued by
Cosipa with the guarantee from Usiminas: B1 (Foreign Currency)

The review is prompted by the overall improved capital structure
of Usiminas on a consolidated basis as a result of the group's
continuous deleverage, the improved debt maturity profile of its
indebtedness and strengthened liquidity position. The review
will focus on the group's ability to maintain its position as a
low-cost producer on a continued basis and continue to report
satisfactory operating margins even during downturn cycles.

Following the conclusion in 2001 of its large investment
program, and benefiting from improved market conditions for
steel, Usiminas has used its higher free cash flow to reduce
indebtedness consistently in the past years. Also, the group has
successfully managed to improve its debt maturity profile by
reducing the concentration of maturities in the short-term,
which combined with the increased cash position has improved the
group's liquidity position, which in turn has helped the group
attain greater financial flexibility.

The Usiminas group is the largest fully integrated flat steel
manufacturer in Brazil and in Latin America. In 2004, Usiminas
produced 9 million metric tons of crude steel using continuous
casting technology, making it the largest producer of crude
steel in Brazil. The Usiminas group, comprising mainly Usiminas
and Cosipa, is one of the top twenty largest steel groups in the
world.



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C O S T A   R I C A
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ICE: Sacks Director for Alleged Irregularities
----------------------------------------------
Telecoms monopoly ICE sacked its director for public telephony,
Willy Arnaez, after an investigation revealed that he committed
irregularities in awarding ICE contracts and received payments
for private consulting, says Business News Americas. ICE's
investigation concluded that Mr. Arnaez had received CRC13
million (US$27,145) from public telephony provider Condicel for
two private consulting projects Condicel wished to develop in
Panama and Ecuador two years ago. Therefore, Mr. Arnaez breached
his contract with ICE that prohibited him from working for other
companies, the Company said.

In addition, ICE also suspected that Arnaez had favored Condicel
when it won a contract in 1998 to rent with an option to buy
15,000 public telephones. However, ICE was unable to prove its
suspicion.

Condicel currently has contracts with ICE worth US$19 million.
Mr. Arnaez reportedly recommended the awarding of contracts last
year to Condicel.



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E C U A D O R
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PACIFICTEL: Chairman Quits Post
-------------------------------
Francisco Guzman has resigned from his post as chairman of
state-run fixed-line operator Pacifictel, reports Business News
Americas. Guzman, who has handled the post for only 47 days,
said his resignation was due to personal problems and he was not
pressured in any way. He will be replaced by Luis Vargas. State
holding company Fondo de Solidaridad (FS), owner of Pacifictel,
is expected to name a new board head.


PETROECUADOR: President Recommends Restructuring
------------------------------------------------
State oil company Petroecuador needs at least US$900 million to
a carry out a much-needed restructuring aimed at improving the
Company's production, MarketWatch reports, citing company
executive president Jorge Pareja Yanuzzelli.

"If we had this US$900 million it would be easy to invest in
improving production, refining, and all other activities," Mr.
Yanuzzelli said.

"We have arrived at a point where we have to decide if we are
going to develop our petroleum industry, which is our main
industry, or are we going to be resigned to losing it," he said.

Mr.Yanuzzelli also revealed that the Energy Ministry will
announce in the next few days a review of petroleum industry
policies.

Petroecuador has proven reserves totaling about 3.5 billion
barrels of oil, and claims an infrastructure valued officially
at $3.0 billion. Production at the state-owned company has been
falling steadily.

Ecuador produces about 197,000 barrels of oil a day.
Petroecuador officials want to increase that to about 200,000
barrels a day by the end of the year.


PETROECUADOR: President Denies Alleged State Indebtedness
---------------------------------------------------------
Petroecuador President Carlos Pareja said he doesn't hold any
outstanding debt with the state, reports Business News Americas.

Mr. Pareja's comments came in response to allegations made by
the country's anti-corruption commission (CCCC) that he owes the
state US$34,000 related to a guarantee on a contract awarded in
March 2002 by the Petroindustrial refining unit of Petroecuador
led at that time by Pareja.

"Neither at the time of taking up my position [as Petroecuador
president] nor at this moment am I unable to carry out my duties
as president of Petroecuador because to have outstanding debt
would entail having missed payment deadlines, which is not the
case," Mr. Pareja said.

Mr. Pareja became Petroecuador's president on June 17.



===============
H O N D U R A S
===============

* HONDURAS: WB Approves $97M Loan For Poverty Reduction
-------------------------------------------------------
The World Bank approved four Thursday zero-interest credits for
a total of $97 million in support of Honduras' comprehensive
poverty reduction strategy.  The credits will fund four projects
in the areas of urban development, rural infrastructure,
nutrition and social safety nets for children and youth, and the
modernization of judicial system.

"These credits are part of our ongoing support to Honduras'
Poverty Reduction Strategy," said Jane Armitage, the World
Bank's Country Director for Central America.  "The Bank is
pleased to support programs that will improve living conditions
for the urban poor; provide increased access to infrastructure
for rural communities; improve opportunities for Honduras'
children and disadvantaged youth; and assist the government in
modernizing its judicial system."

The US$15 million Barrio Ciudad Project will improve the quality
of life for the urban poor and enable their municipal
governments to continue and sustain such improvements through
capacity building and improved access to credit. The project
will finance urban services and infrastructure in intermediate
to large-size cities; poverty-targeted urban neighborhood
upgrading and development; municipal government strengthening;
and urban crime and violence prevention schemes.

The US$47 million Rural Infrastructure Project will support two
of the six pillars of the Poverty Reduction Strategy by reducing
rural poverty and promoting sustainability. The project will
provide rural communities with access to improved infrastructure
services (roads, water & sanitation and electricity) on a
sustainable basis. The project will be implemented at the local
level, working directly with the association of municipalities
(mancomunidades), supporting the Government's decentralization
objective.   In the process, the project will enhance the
capacity of the institutions, both local and central, to manage
rural infrastructure.

The US$20 million Nutrition and Social Protection Project will
improve the nutritional and basic health status of pre-school
Honduran children by expanding the successful AIN-C program--a
low-cost, community-based program that prevents malnutrition by
counseling mothers about appropriate child feeding and other
child-rearing practices--and by piloting a First Employment
program for disadvantaged youth. The coordinated implementation
o f these interventions constitutes the first step towards
consolidating the government's institutional and technical
capacity to formulate, coordinate, and monitor a comprehensive
social safety net. This objective supports government's strategy
of fostering human capital investment among poor families in the
poorest municipalities of the country to reduce poverty.

The US$15 million Judicial Branch Modernization Technical
Assistance Project will bring the Bank's knowledge and know-how
in designing and implementing successful judicial reform
strategies in Central America and elsewhere. The Project will
improve the Judicial Branch performance, especially with respect
to efficiency, transparency, and access.   It will promote
reform through an integrated and participatory manner involving
all stakeholders-judges, court staff, users and civil society.
Although time consuming, such a process pays real dividends in
terms of better defining problems and priorities, identifying
home-grown solutions and/or refinements, and promoting reform
ownership, public legitimacy, and sustainability.

All the credits, from the International Development Association
(IDA), the World Bank's concessionary lending arm carry a 10-
year grace period and a 20-year maturity period.

CONTACT: World Bank
         Media Contacts
         Yanina Budkin
         Phone: 4316-9700
         E-mail: ybudkin@worldbank.org

         Alejandra Viveros
         Phone: (202) 473-4306
         E-mail: aviveros@worldbank.org
         URL: http://web.worldbank.org



=============
J A M A I C A
=============

AIR JAMAICA: Government, Opposition Compromise to Save Airline
--------------------------------------------------------------
Government has approved the appointment of a joint select
committee of Parliament to enquire into the money problems of
Air Jamaica, The Jamaica Observer reports. The decision was made
to gain the opposition's approval to an additional government
support for the airline.

The opposition earlier said that without an agreement to probe
into Air Jamaica's financial loses, it will not approve
government guarantees to secure loans totaling US$335 million
(J$20.4 billion) to assist in the financial and operational
restructuring of the airline.

The guarantees cover the following:

- US$200 million long term fixed rate private placement by Bear
Stearns among institutional investors in the United States and
Europe to, in part, refinance some of the short term debt of the
ailing airline at 9.375 per cent interest;

- US$125 million bond issue by RBTT Merchant Bank at 5.50%
interest; and,

- US$10 million National Commercial Bank(NCB) revolving bank
facility at 4.7% interest.

Minister of Finance and Planning Dr. Omar Davies said the
government and the opposition would work together in defining
the precise terms of reference for the committee, which will
comprise members of both houses.

Davies also promised to table the Sabre Report, as well as a
draft business plan for the airline, after he has taken the
documents to Cabinet.

"It is imperative that transparency prevails. We have nothing to
hide," he said.

Refinancing is "absolutely necessary," said Davies, if Air
Jamaica is to attract the kind of management that it needs to
revive its fortunes.

CONTACT: AIR JAMAICA
         Corporate Communications
         Tel: 876-922-3460 ext 4060-5
         URL: www.airjamaica.com



===========
M E X I C O
===========

INNOVA: Moody's Upgrades Corporate Family Rating to Ba3 from B2
---------------------------------------------------------------
Moody's Investors Service has upgraded Innova, S. de R.L. de
C.V's corporate family rating to Ba3 from B2 to reflect Innova's
improved credit metrics as a result of the successful absorption
of DirecTV's subscribers in Mexico as well as disciplined sales
and cost management.

The same change to Ba3 from B2 was made to the senior unsecured
and long term issuer ratings for the Mexican corporate. The
outlook on the ratings is now stable.

The following issue was affected by Moody's upgrade:

- US$300 million of 9.375 Senior Unsecured Notes due 2013

Innova's ratings upgrade is supported by its consistent growth
in EBITDA and higher EBITDA margins (42.3% in 1Q05), which
Moody's expects will convert, by FYE 2005, to free cash flow
equal to 20% of total debt. The earnings growth reflects a
growing subscriber base and very disciplined cost controls. In
addition, the company has considerably extended its amortization
profile through refinancing its 2007 debt maturity at a lower
rate of interest.

Innova has increased its share of the Mexican Pay-TV market,
which reached approximately 25% at 1Q05 and maintained the
company as # 1 Pay-TV operator and the only direct-to-home (DTH)
provider in Mexico. Innova's competitive strength is a
consequence of regular improvements in its operations and
customer care as well as the satisfactory incorporation of ex-
DirecTV subscribers to its network (a total of 140,000
subscribers with contracts of longer than six months expected
for YE 2005), as Moody's anticipated in its in changing Innova's
outlook to positive from stable in October 2004. The key to
Innova's successful business model has been its strategic focus
on exclusive and high quality content, further supported by a
national coverage, exclusive programming, which includes popular
reality shows, soccer games and some special events, and an
improved customer service. In addition, the company has been
putting extra attention on sales efforts and cost controls in
the last years.

Also supporting its rating is Innova's enhanced debt maturity
profile with no substantial maturity until 2010 (approximately
US$45 million) coupled with the bulk of its indebtedness (US$300
million) maturing in 2013. In addition, the company has reduced
its exposure to dollar payment obligations to US$80 million via
contractual foreign exchange caps with programmers, as well as
by entering into currency swaps. The agency also took into
consideration the continuous support from Innova's major
shareholder, Televisa, as well as from NewsCorp.

The ratings are however constrained by the company's relatively
small size, uncertain long-term growth prospects, strong
competition from cable companies, and absence of a back-up
system to cover its exposure to PanAmSat, all of which have a
clear potential impact on the company's financial performance.
Innova has taken share from its cable television competitors in
the last 18 months by offering stronger programming and more
reliable service. Moody's expects the company will continue to
progress as long as the system operators are a) fragmented and
b) converting to digital from analog, with service disruptions.
However, the agency remains concerned about the long term
prospects for consolidation among cable systems, which would
diminish Innova's competitive advantage.

Stronger revenues and operating cash flow generation has allowed
Innova to reduce its leverage. Since 2003, Innova has been able
to fund its operating expenses and capex with internally
generated cash instead of receiving additional funds from
shareholders. Moody's expects the same in 2005, although the
company is planning on capital expenditures of over US$110
million, which is approximately twice the amount spent annually
in the last two years. The increased capex is justified by the
migration of subscribers from DirecTV and the smart card change-
over that the company is undertaking.

The rating outlook is stable and incorporates the strength of
Innova's market position as well as its ability to increase
revenues and post growing free cash flows. Innova's ratings
could experience upward pressure if the company posts free cash
flow in amounts that reduce its leverage exposure, expressed by
total debt to FCF lower than 3 times, and if it increases
interest coverage, as per EBITDA to interest expense ratio, over
6.5 times with prospects of consistently maintaining minimum
such levels in the foreseeable future thereafter. Also, an
upgrade could be considered if the company uses internally
generated cash to further reduce debt. Should the company not
maintain stable subscriber growth through 2007, or suffer
significant reductions in average revenue per user (ARPU),
currently at approximately US$34, Moody's would expect
deterioration in the credit metrics to follow and place pressure
on the rating. The rating agency notes that subscriber growth is
also vulnerable to an economic slowdown or any unexpected major
operating problem that affects its operations or those of its
sole supplier, PanAmSat, which may result in a downgrade of
Innova's ratings.

Innova, a Mexican provider of satellite TV services, is
headquartered in Mexico City, Mexico.



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA: Prime Minister Discusses Murky Outlook
--------------------------------------------
There is still no clear picture as to what BWIA's future would
be, The Trinidad Express reports, citing Prime Minister Patrick
Manning. Presently, the Cabinet is analyzing a report [on the
airline's operations and the future for the airline] prepared by
a group of prominent businessmen led by Arthur Lok Jack, who is
known as a "master entrepreneur."

Nevertheless, Mr. Manning warned that whatever option the
government is going to take on BWIA, he said "it will not be
cheap.

"And what we would really like to see is one Caribbean airline,"
he said, noting what he said were the difficulties being
experienced by the government of Jamaica with Air Jamaica and
the government of the Bahamas with Bahamas Air.

For Trinidad and Tobago, "there are no sacred cows, including
BWIA," he said, adding that the question still remained "if BWIA
survives."

CONTACT: BRITISH WEST INDIES AIRWAYS (BWIA)
         Phone: + 868 627 2942
         E-mail: mail@bwee.com
         Home Page: http://www.bwee.com


                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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